June 21, 2017

Etsy won’t make you rich

I saw this graph online from Earnest, a student loan re-financing company, and loved it.

They studied how much people make at different “gig economy” jobs. See all those 0% at reasonable wages — like 0% of Uber drivers make $2,000/mo ( $24,000 a year ). This shows the problem we need to solve as policy. These companies minimize wages in ways that are unconscionable. They violate the social contract routinely, and we citizens take advantage because we want cheap cab rides from a guy named Michael. Almost all are equally bad — the median monthly income on Etsy, for example, is $40. 1% make more than 2K. You can’t live on $40/mo. Yet I meet people all the time who think, “Well, I’ll make things and sell on Etsy to survive!” No, you won’t. You’ll laser engrave a few trinkets and be lucky to make $100 that month.

So, might as well scratch Etsy/Uber off the “survival money” list — you just won’t make it. If you can afford to own property, AirBnb might work. If you don’t mind hours, TaskRabbit might work. Might — even then, you’re unlikely to make it. America has been paying its service workers too little for too long, because we haven’t been taxing capital enough for a long time. We could pass legislation to increase worker pay — and should. We need to start taxing equipment like we do labor, so that we can build the infrastructure of our future. People pay income tax, which is really a supply tax in disguise. ( Most people worked at a corporation, then paid income taxes on the income they got from the corporation. If you think about that, it’s really a supply tax. ) If the IRS can tax the labor part of supply, then why not tax the capital side? Bill gates recommends this, and it makes sense in our changing economy.